SU 5

Which of the following statements is false according to communications theory? A. The process has three elements: sender, medium, and receiver. B. Two-directional communication is usually most effective. C. Communication is the message actually received, not the message that is transmitted. D. Informal communications are used by effective managers.

A. The process has three elements: sender, medium, and receiver. The communication process has six elements: the sender, the symbols in which the message is encoded, the medium through which the message is sent, the decoding of the message, the receiver, and feedback.

Communication is most likely to be effective when A. The sender carefully considers the receiver's needs. B. Sender and receiver concentrate only on verbal messages. C. It changes the receiver's attitude. D. The receiver monitors the sender's behavior.

A. The sender carefully considers the receiver's needs. The needs, abilities, and skills of the receiver must be taken into account by the sender. The sender must fit the message to what the receiver can effectively receive or the message will be useless.

An individual who has been formally assigned the task of facilitating communication through a variety of media is sometimes called a A. Gatekeeper. B. Liaison. C. Opinion leader. D. Channel selector.

B. Liaison. A liaison, or media liaison, is an individual in an organization who has been formally assigned the job of facilitating communication. This is usually in the form of a public relations liaison, but in large organizations, internal communication could also be a part of the job.

Tolerating silence, asking open-ended questions, and paraphrasing are three aids to more effective A. Meetings. B. Listening. C. Interviews. D. Feedback.

B. Listening. Listening entails decoding and understanding the first message sent. The sender then becomes a listener with respect to the feedback. Hence, listening is necessary at both ends of the communication channel. Other aids to effective listening are using body language to encourage the speaker, showing appropriate emotion to signify sympathy, understanding and correcting for one's biases, avoiding making premature judgments, and briefly summarizing what has been said.

Studies of managerial communications have indicated that A. Most managers are excellent communicators. B. Managers spend most of their time communicating. C. Written communication takes more of a manager's time than oral communication. D. Most effective communicators will be good managers.

B. Managers spend most of their time communicating.

Manic Manager is trying to figure out the best way to convey certain information to his employees. Which of the following correctly categorizes the media richness of a medium as high or lean? High | Lean (low) A. Email | Face-to-face meeting B. Email | Memo C. Letter | Memo D. Face-to-face meeting | Email

D. Face-to-face meeting | Email A face-to-face meeting is an example of high media richness, and an email is an example of lean media richness.

Which of the following steps works against effective listening? A. Listening for the emotion in the situation. B. Asking good questions. C. Listening to the steps to reach a solution. D. Helping the speaker to complete the point.

D. Helping the speaker to complete the point. By interrupting the speaker, even with good intentions, the listener may inhibit further communication. The listener also may be drawing unwarranted conclusions.

The marketing manager of a corporation wrote an interdepartmental memorandum to the budget manager concerning corrections to the sales forecast for the coming year. What is this an example of? A. Downward communication. B. Upward communication. C. Informal communication. D. Horizontal communication.

D. Horizontal communication. An interdepartmental memorandum, as described, is a horizontal communication in that no superior-subordinate relationship is involved.

An audit committee of the board of directors of an organization is being established. Which of the following is normally a responsibility of the committee with regard to the internal audit activity? A. Approval of the selection and dismissal of the chief audit executive. B. Development of the annual engagement work schedule. C. Approval of engagement work programs. D. Determination of engagement observations appropriate for specific engagement communications.

A. Approval of the selection and dismissal of the chief audit executive. Independence is enhanced when the board concurs in the appointment or removal of the CAE (PA 1110-1). The audit committee is a subcommittee of outside directors who are independent of management. The term "board" includes the audit committee.

Audit committees have been identified as a major factor in promoting the independence of both internal and external auditors. Which of the following is the most important limitation on the effectiveness of audit committees? A. Audit committees may be composed of independent directors. However, those directors may have close personal and professional friendships with management. B. Audit committee members are compensated by the organization and thus favor an owner's view. C. Audit committees devote most of their efforts to external audit concerns and do not pay much attention to the internal audit activity and the overall control environment. D. Audit committee members do not normally have degrees in the accounting or auditing fields.

A. Audit committees may be composed of independent directors. However, those directors may have close personal and professional friendships with management. The audit committee is a subcommittee made up of outside directors who are independent of management. Its purpose is to help keep external and internal auditors independent of management and to ensure that the directors are exercising due care. However, if independence is impaired by personal and professional friendships, the effectiveness of the audit committee may be limited.

Which of the following is false with regard to email policies? A. Employees may use informal writing because email is often informal in nature. B. Employees should understand that the organization has a legal right to monitor the employees' use of the email system. C. Filters should be used to protect against spam. D. Emails should be concisely written.

A. Employees may use informal writing because email is often informal in nature. The principles of good writing still apply to emails. Thus, emails should be written with the same care as formal communications within the organization.

All of the following are elements of the communication process except A. Enrolling. B. Sending. C. Receiving. D. Encoding.

A. Enrolling. The six elements of the communication process are the sender, the process of encoding the symbols of which the message consists, the medium through which the message is sent, the receiver, the receiver's act of decoding the message, and feedback.

In a report, an internal auditor stated that communication in the auditee area was poor with employees deciding in advance which information should be given to management so as to present themselves in the best possible light. This is an example of A. Filtering. B. Selective perception. C. Emotion. D. Language.

A. Filtering. Filtering of a message is the sender's manipulation of information so that it will be viewed more favorably by the receiver. Filtering is a typical problem in upward communication, e.g., from employee to manager.

Which of the following are considered disadvantages of electronic communication? I. Information overload. II. Misrepresentation of feelings and emotions. III. Reduced transmission time. IV. Lack of paper trail. A. I and II only. B. II and IV only. C. I, II, and III only. D. I, II, III, and IV.

A. I and II only. Information overload and misrepresentation of feelings and emotions are drawbacks of electronic communication. Information overload, such as numerous email messages, may lead to lost time and inefficiencies. Also, email cannot accurately convey the feeling and tone intended by the person initiating the communication. Accordingly, it may be misinterpreted by the receiver.

Which of the following actions is an appropriate response by organizations wishing to improve the public's perception of their financial reporting? A. Increased adoption of audit committees composed of outside directors. B. Viewing internal auditing as a transient profession—a stepping stone to managerial positions. C. Requiring internal auditors to report all significant observations of illegal activity to the chief executive officer. D. Keeping external and internal auditing work separated to maintain independence.

A. Increased adoption of audit committees composed of outside directors. The audit committee consists of outside directors who are independent of management. Its purpose is to help keep external and internal auditors independent of management and to assure that the directors are exercising due care. This committee selects the external auditors; reviews their overall audit plan; examines the results of external and internal auditing engagements; meets regularly with the CAE; and reviews the internal audit activity's engagement work schedule, staffing plan, and financial budget. These functions should increase public confidence that financial statements are fairly presented.

"But I mailed the order 4 weeks ago, giving the supplier plenty of time," said the parts manager when asked why a critical part was not available. The most likely reason for this failed communication between the parts manager and the supplier was A. Lack of feedback. B. Confusing language. C. Inappropriate medium. D. Perceptual selectivity.

A. Lack of feedback. The effectiveness of communication can be determined only by the sender seeking feedback and observing the impact of the communication on the receiver. The sender is obligated to solicit feedback to ensure that the communication process is complete. The receiver should give feedback to the sender. The importance of feedback to check the effectiveness of the communication process indicates the limitations of one-way communications (e.g., memos). Effectiveness can only be measured when the sender perceives a change in the receiver's behavior. Thus, the parts manager (the sender) should have sought, and the supplier (the receiver) should have provided, feedback.

Which of the following is a false statement regarding the organizational aspects of communication? A. Modern communication theory acknowledges that message flow tends to be the same within all organizations regardless of structure. B. Traditional management stresses one-way communications from senior management down to subordinates. C. Participative management stresses multidirectional communication. D. Feedback is crucial in determining how effective a message was.

A. Modern communication theory acknowledges that message flow tends to be the same within all organizations regardless of structure. Organizational structure determines how communication is transmitted.

The benefits of electronic communication for a company and the company's employees include A. More efficient use of resources to increase profitability. B. Creation of redundant tasks that allow employees to develop expertise. C. Constant development of new procedures. D. Elimination of simulation models.

A. More efficient use of resources to increase profitability. The benefits of electronic communication include better control of information, more timely information, elimination of tedious tasks, improvement of competitiveness due to improved technology, standardization of procedures by computer programs, assistance for strategic planning, and optimization of organizational resources to improve productivity.

A manager found that instructions given to a subordinate were not followed. A review of the cause of the failure revealed that the manager was interrupted by several telephone calls while issuing the instructions. In terms of problems in the communications chain, the interruptions are A. Noise. B. Nonverbal feedback. C. Semantics. D. Closure.

A. Noise. Noise in the communication channel refers to any disruption that impedes the encoding, sending, or receipt of a message, such as being interrupted by several telephone calls while issuing instructions.

The audit committee may serve several important purposes, some of which directly benefit the internal audit activity. The most significant benefit provided by the audit committee to the internal audit activity is A. Protecting the independence of the internal audit activity from undue management influence. B. Reviewing annual engagement work schedules and monitoring engagement results. C. Approving engagement work schedules, scheduling, staffing, and meeting with the internal auditors as needed. D. Reviewing copies of the procedures manuals for selected organizational operations and meeting with organizational officials to discuss them.

A. Protecting the independence of the internal audit activity from undue management influence. The audit committee is a subcommittee of outside directors who are independent of corporate management. Its purpose is to help keep external and internal auditors independent of management and to ensure that the directors are exercising due care. This committee often selects the external auditors, reviews their overall audit plan, and examines the results of external and internal audits.

Some studies show that managers spend 60 to 70% of their time communicating and that nearly 60% of that time is spent listening. Listening effectiveness is best increased by A. Resisting both internal and external distractions. B. Waiting to review key concepts until the speaker is through talking. C. Tuning out messages that do not seem to fit the meeting purpose. D. Factoring in biases to evaluate the information being given.

A. Resisting both internal and external distractions. Concentrating on what the speaker is saying is critical to effective listening. This result is best achieved by resisting internal and external distractions. Physical distractions such as noise, a tendency to be overly aware of the speaker's physical and other differences from the listener, focusing on interesting details at the expense of major points, or emotional reactions to a statement with which the listener disagrees should be avoided.

Noise may disrupt communication during transmission. All of the following are examples of noise except A. Selective perception. B. Static on a telephone line. C. A letter lost because it was interspersed with junk mail. D. A participant in a conversation being called away for a meeting.

A. Selective perception. Noise in a communication channel is an outside disruption that impedes the flow of a message. It can vary from real noise, such as loud machines running and static on a phone line, to disruptions such as phone calls during a face-to-face conversation. Selective perception on the part of either the sender or the receiver of a message is not noise because it is not an outside disruption.

Effective communication is most likely to take place when the A. Sender and receiver share similar frames of reference. B. Message is stated in general rather than specific terms. C. Message is delivered as quickly as possible. D. Sender ignores any underlying assumptions.

A. Sender and receiver share similar frames of reference. Effective communication is likely to have the least amount of distortion when the sender and the receiver share similar frames of reference. If both sender and receiver understand the symbols used to communicate and the underlying assumptions concerning the problem, the message will be easier to write, to send, and to understand.

Which of the following is a true statement about corporate stakeholder relationships? A. The chief audit executive (CAE) must have direct and unrestricted access to senior management and the board. B. The audit committee must be able to override management decisions that it believes conflict with the committee's charter. C. Key stakeholders must be able to share their views on corporate governance with the chief audit executive and internal audit staff. D. All members of the board must be qualified members of the audit committee.

A. The chief audit executive (CAE) must have direct and unrestricted access to senior management and the board. For the internal audit activity to achieve organizational independence, the chief audit executive (CAE) must have direct and unrestricted access to senior management and the board.

Which one of the following is not an example of formal communication within an organization? A. The grapevine. B. Variance analysis. C. The performance evaluation system. D. A budget.

A. The grapevine. Formal communication is conducted through the officially established structure of the organization. Informal communication operates outside officially established structural channels. The grapevine is an example. Although the grapevine is usually accurate, it can also carry gossip and rumor.

When evaluating communication, the accountant should be aware that nonverbal communication A. Is independent of a person's cultural background. B. Is often imprecise. C. Always conveys a more truthful response. D. Always conveys less information than verbal communication.

B. Is often imprecise. Nonverbal communication (body language) consists of facial expressions, vocal intonations, posture, gestures, and appearance, and physical distance. Thus, by its nature, nonverbal communication is much less precise than verbal communication.

In which one of the following statements is the use of accounting jargon an impediment to communication between accountants and nonaccounting professionals? A. "Labor standards tell how much time workers should take to assemble a computer." B. "The assigned auditor is trying to decide whether the million dollar disbursement should be expensed or capitalized." C. "In carrying out variance analysis, the assigned auditor is seeking the possible reasons why the net income shown in the financial statements for the year 2011 is 20% less than expected." D. "An accounting department in a factory is classified as a service because the accounting department allows the departments actually involved in the making of products freedom from bookkeeping chores."

B. "The assigned auditor is trying to decide whether the million dollar disbursement should be expensed or capitalized." The use of jargon leads to communication problems when a specialist tries to send a message to a nonspecialist. The use of the phrase "expensed or capitalized" is a use of jargon in that a nonaccountant might not understand the technical meaning of the terms. Thus, the recipient of the message may not be able to provide a clear answer.

Communication plays an important role in the successful operation of all organizations. Which of the following statements concerning organizational communications is false? A. Communication involves at least two people: a sender and a receiver. B. Communication is what the sender says, not what the receiver understands. C. Every act of communication influences the organization in some way. D. Management spends the majority of its time communicating with other members of the organization.

B. Communication is what the sender says, not what the receiver understands. The communication process has six elements: the sender, the symbols in which the message is encoded, the medium through which the message flows, the decoding of the message, the receiver, and feedback. Because the effectiveness of communication can be known only by its impact on the receiver and the perceived change in the receiver's behavior, the received message must govern the definition. The sent message may be garbled in encoding, in transmission, or in the receiver's decoding.

Which of the following is a potential disadvantage of listening by a manager? A. Demonstrates concern for subordinates by the manager. B. Concentration may be focused on the words spoken to the exclusion of the ideas. C. Gain more information about the workplace. D. May result in higher employee morale.

B. Concentration may be focused on the words spoken to the exclusion of the ideas. If a manager is focused on the words spoken by someone else and not the intended ideas, a decoding problem exists. Effective listening requires understanding the message the communicating party is trying to convey.

Job instructions, official memos, and procedures manuals are examples of which type of organizational communication? A. Upward. B. Downward. C. Lateral. D. Diagonal.

B. Downward. Downward communication (from superior to subordinate) is vertical communication consisting of orders, instructions, notices, memos, bulletins, newsletters, handbooks, loudspeakers, and the chain of command. It also includes job instructions and procedures manuals.

Which of the following devices translates the intended message into the sender's chosen communication form? A. Transmitter. B. Encoder. C. Channels. D. Decoder.

B. Encoder. Answer (B) is correct. The encoder is a device used to translate the sender's message into an appropriate form of communication. This communication form is selected by the sender of the message. The device may be verbal, written, or nonverbal, such as facial expressions or voice inflections. Computers are often used as encoders.

Which one of the following is not an example of formal internal communication? A. Input for the yearly budget provided by the Purchasing Department to the director of budgeting. B. Environmental impact statements. C. Expense account reports. D. Safety bulletins.

B. Environmental impact statements. A formal communication is conducted through the formal structure of the organization. Informal communication operates outside of officially established channels. An internal communication is one that is both generated and received within the organization. An environmental impact statement is generated within the organization, but the recipient (a governmental body) is outside the organization.

In some organizations, first-line supervisors withhold or alter unfavorable information that the supervisors do not want higher management to know. This selective withholding of information is widely known as A. Selective reception. B. Filtering. C. Regulating information flow. D. Perceptual defense.

B. Filtering. Communication within an organization must be clear, appropriate, and properly transmitted. Distortion can be unintentional (e.g., a phone line going dead), or it may follow from deliberate filtering either by the sender or an intermediary. The auditor should watch for indications that first-line or lower-level management is "filtering" out bad news or covering up irregularities.

Which of the following is an example of a badly encoded message? A. Inattention or disinterest in the message. B. Inconsistency between verbal and nonverbal messages. C. Gesturing to someone who cannot see the gesture. D. Sender's dislike of receiver.

B. Inconsistency between verbal and nonverbal messages. If body language or tone of voice send a message different from the spoken words, the receiver will not be clear about the meaning of the message.

All of the following are aspects of electronic communication except A. Optimization of organizational resources. B. Increase in tedious tasks. C. Assistance for strategic planning. D. Better control of information.

B. Increase in tedious tasks. The reduction of tedious tasks, such as preparing hardcopy memos, is made possible by electronic communication.

The basic purposes of an organization's internal communications network include all of the following except A. Obtaining a common focus among employees. B. Informing potential investors about company operations and financial results. C. Aiding high-quality decision making. D. Integrating the efforts of specialists.

B. Informing potential investors about company operations and financial results. Because all managerial functions require communication, it is the secret to the success of any manager. A manager's ability to understand other people, and their ability to understand the manager, are crucial to accomplishing organizational objectives. Communication is the link that ties an organization together and transforms a diverse group of people into a cohesive whole. An organization's internal communications network is designed to facilitate decision making among managers, to promote goal congruence among employees, integrate the efforts of all employees, and build high morale and mutual trust. Informing potential investors about company operations is a purpose of the external, not internal, communications network.

Because communication is vital to effective management, managers spend most of their time communicating. Consequently, managers A. Who are good communicators will be effective. B. Mostly engage in oral communication. C. Devote most of their time to formal, written communication. D. Are essentially senders of messages.

B. Mostly engage in oral communication. Because communication is the process of conveying meaning or understanding from one person to another, managers must spend most of their time communicating with subordinates, peers, and superiors. More of this communication is oral and informal than written and formal. Managers communicate lower-level results and problems upward, and coordinating information horizontally. Infrequently, communication may also be among peers or across organizational channels.

Which one of the following statements about human perception and human perception's role in the communication process is false? A. Perception is used to interpret information from the environment. B. Perception can distort communication only at the end of the communication process. C. Selective perception refers to the tendency to remember what we prefer and to forget what we are uncomfortable with. D. Stereotyping is a form of perceptual organization.

B. Perception can distort communication only at the end of the communication process. Managers must always consider the perceptions of a message recipient. Recipients vary in their perception of messages because of background, language, education, attitudes toward the sender (such as stereotyping) and job, etc. This variance can result in communication distortion at any stage of the communication process.

Which of the following is unlikely to cause changes in attitudes? A. Make sure that the message is credible. B. Present many different issues in as short a time as possible. C. Shape the argument to the listener. D. Focus the presentation on the ultimate objective.

B. Present many different issues in as short a time as possible. Presenting many different issues in as short a time as possible will confuse the listener and cause the message to be lost or disregarded. To convey a persuasive message effectively, the communicator should make a clear presentation that focuses on the ultimate objective. The argument should be stated one idea at a time, and unrelated subjects and jumping from issue to issue should be avoided. The presentation should guide the recipient of the communication directly to the desired conclusion.

Which of the following perceptual errors is the tendency for one party to attribute his/her traits to the other party when communicating? A. Expectancy. B. Projection. C. The halo effect. D. Stereotyping.

B. Projection. Perception is the process used to adapt the message to the receiver during encoding or to interpret the message from the sender when decoding. Perceptual errors cause misinterpretation of the intended message. Projection is the tendency for the sender to attribute his/her traits, values, and emotions to the receiver and vice versa.

The biggest advantage of oral communication over written communication is that oral communication A. Tends to be more accurate. B. Promotes feedback. C. Is less time-consuming. D. Does not provide a permanent record.

B. Promotes feedback. Oral communication promotes immediate feedback so that the sender knows that the message has been clearly received by the receiver.

Which of the following terms most adequately describes the practice of working outside the office? A. Electronic mail. B. Telecommuting. C. Videoconferencing. D. Social networking.

B. Telecommuting.

Which of the following is a benefit of implementing an electronic communication system? A. Relatively low capital expenditures are required. B. The company's comparative advantage over smaller firms that cannot afford such a system will increase. C. There is little need for additional resource allocation to facilitate implementation of the system. D. The sophistication of electronic communication systems eliminates the need for backup files and data recovery systems.

B. The company's comparative advantage over smaller firms that cannot afford such a system will increase. Implementation of an electronic communication system improves the technology of a company. This increases the company's advantage over smaller companies that cannot afford electronic communication systems.

Fact Pattern: The supervisor of purchasing reviewed a memorandum prepared for a buyer in the department. The memo read, "Effective September 30, the corporation has determined that your functions will be absorbed into our parent company's small-unit purchasing function. This will reduce operating costs, improve communications, and facilitate production engineering changes. You will be provided with outplacement support." "That should cover the situation," thought the supervisor. "It's too bad that I am leaving on vacation before the buyer returns from vacation, but this memo will give the buyer the general idea." What link in the communications chain is defective? A. The meaning of the message would be unclear to the buyer. B. The supervisor chose the wrong channel for the communication. C. The supervisor should not be the source of this type of communication. D. The supervisor did not account for the noise in the communication chain.

B. The supervisor chose the wrong channel for the communication. In the communications process, the medium is the channel through which the communication flows. The defect in this case was the channel chosen to inform the employee of his/her loss of job. The supervisor should have spoken directly with the employee.

Which of the following is least appropriate with regard to management's approach to informal group or grapevine communication? Management should A. Use informal group information to supplement communication channels of the formal organization. B. Try to suppress informal group information as a possible source of conflicting information. C. Take advantage of informal group information as a device to correct misinformation. D. Make use of informal group information as a means of transmitting information not appropriate for formal communication channels.

B. Try to suppress informal group information as a possible source of conflicting information. The effective manager stays tuned in to the grapevine and uses it constructively.

Fact Pattern: The supervisor of purchasing reviewed a memorandum prepared for a buyer in the department. The memo read, "Effective September 30, the corporation has determined that your functions will be absorbed into our parent company's small-unit purchasing function. This will reduce operating costs, improve communications, and facilitate production engineering changes. You will be provided with outplacement support." "That should cover the situation," thought the supervisor. "It's too bad that I am leaving on vacation before the buyer returns from vacation, but this memo will give the buyer the general idea." Select an additional deficiency in the communication chain. A. The receiver of the communication was inappropriate; the personnel department should have received the memorandum and then informed the buyer. B. The message is improperly encoded because the buyer does not know why the termination is to be completed. C. Because the supervisor and buyer have conflicting vacation schedules, no possibility exists for feedback. D. The supervisor should not be the sender of the memorandum; the personnel department is the appropriate source.

C. Because the supervisor and buyer have conflicting vacation schedules, no possibility exists for feedback. The communications process has six elements: (1) the sender of the message, (2) symbols used to encode the message, (3) the medium chosen to send the message, (4) the decoding of the message, (5) the receiver of the message, and (6) feedback acknowledging interpretation of the message by the receiver. Because the supervisor and buyer have conflicting vacation schedules, no possibility exists for feedback, and the buyer is not referred to anyone else in the organization for any additional information.

All of the following statements about communication are false except A. Managers spend more of the workday involved in written communication than oral communication. B. Written communication encourages feedback. C. Breakthroughs in electronic technology will blur the distinctions between written and oral communications. D. The grapevine rarely provides accurate information.

C. Breakthroughs in electronic technology will blur the distinctions between written and oral communications. Breakthroughs in electronic technology may lead to oral messages being recorded and subsequently written out.

Communication is the process by which meaning is conveyed between people. According to communications theory, A. The process has three elements: sender, medium, receiver. B. One-directional communication is usually most effective. C. Communication is the message actually received, not what is transmitted. D. Informal communications are usually to be avoided because of their inaccuracy.

C. Communication is the message actually received, not what is transmitted. The communication process has six elements: the sender, the symbols in which the message is encoded, the medium through which the message flows, the decoding of the message, the receiver, and feedback. Because the effectiveness of communication can be known only by its impact on the receiver and the perceived change in the receiver's behavior, the received message is what is communicated. The sent message may be garbled in encoding, in transmission, or in the receiver's decoding.

Which of the following is a true statement about organizational communication? A. Cellular telephones should never be used for business purposes. B. Downward communication can never be informal. C. Errors in communication can be caused by problems in both the encoding and decoding stages. D. The sender and receiver must agree beforehand on the appropriate medium for communication.

C. Errors in communication can be caused by problems in both the encoding and decoding stages. Errors in communication can be caused by problems in both the encoding and decoding stages.

Which of the following is a source of communication breakdown within an organization due to a sense of superiority by members of a particular culture? A. Perceptual problem. B. Stereotyping. C. Ethnocentrism. D. Uncertainty avoidance.

C. Ethnocentrism. Ethnocentrism is the attitude that one's own group is superior. It is perpetuated through the value structures and nationalistic spirit of the people.

Which of the following is not normally considered a stakeholder of a corporation? A. Government regulator. B. Shareholder. C. Financial journalist. D. Chief financial officer.

C. Financial journalist.

The audit committee strengthens the control processes of an organization by A. Assigning the internal audit activity responsibility for interaction with governmental agencies. B. Using the chief audit executive as a major resource in selecting the external auditors. C. Following up on recommendations made by the chief audit executive. D. Approving internal audit activity policies.

C. Following up on recommendations made by the chief audit executive. Internal auditors should have the support of senior management and the board (board of directors, audit committee, board of trustees of a not-for-profit organization, etc.) to gain the cooperation of engagement clients and perform their work free from interference. At a minimum, the CAE needs to report to someone with sufficient authority to promote independence and ensure broad audit coverage, adequate consideration of engagement reports, and appropriate action on engagement recommendations (PA 1110-1, para. 2). Moreover, among the audit committee's functions are to ensure that engagement results are given due consideration and to receive distributions of final engagement communications by the internal auditors (PA 2440-1). This enhancement of the position of internal auditing in turn strengthens control processes.

Which of the following are effective active listening techniques? I. Summarizing. II. Clarifying. III. Evaluating. IV. Empathizing. A. I and IV only. B. II and III only. C. I, II, and IV only. D. I, II, III, and IV.

C. I, II, and IV only. Summarizing brings the discussion into focus and clarifies priorities. Clarifying content or process helps others explore the problem and make their ideas more concrete. Empathizing shows that the listener understands how the other person feels and encourages him/her to express feelings. However, evaluating may curtail the presentation of views and lead another person to believe that the listener's mind is already made up.

Which of the following terms does not apply to noise in communication? A. Encoding. B. Sending. C. Interpretation. D. Decoding.

C. Interpretation. Interpretation is a subprocess of perception. Noise is a disruption that impedes the communication process.

Organizational characteristics that may be barriers to effective communications include all of the following except A. Organizational status differences. B. Lack of formal channels. C. Listening problems. D. Departmental needs and goals.

C. Listening problems. Listening problems are personal characteristics, not organizational characteristics that may cause communication problems.

A purchasing agent placed a rush telephone order with a supplier. The clerk in the supplier's office repeated the order specifications back to the purchasing agent. No written confirmations were exchanged. The shipment arrived late and was of the wrong quantity. However, the purchasing agent was unable to prove that the shipment was unsatisfactory. What link of the communication chain has failed in this scenario? A. Encoding. B. Decoding. C. Medium. D. Feedback.

C. Medium. In the communication process, the medium is the channel through which the communication flows. The failure in this case was caused by the choice of a medium that did not create a permanent record of the facts of the communication.

Fact Pattern: A multinational firm was attempting to buy a controlling interest in a medium size (US $10 million annual sales) foreign metal-working firm. The multinational firm's negotiator in the foreign country sent the following email: "The foreign firm won't deal unless 51% ownership." The executive committee of the multinational firm, not wanting a minority interest, then canceled the deal. Upon returning to the multinational firm, the negotiator pointed out that the foreign firm wanted to sell no more than 51% ownership in order to retain at least 49%. Thus, the deal could have been made. The email received by the executive committee was faulty. In terms of the links in the communications process, the error occurred because of A. Noise in the communication chain. B. The sender's perception. C. Message encoding. D. The choice of transmission medium.

C. Message encoding. Encoding is the sender's packaging of an idea for better understanding. It involves translating the message into symbols that can be transmitted through the chosen medium of communication and then decoded by the recipient. In this example, the sender's wording of the message was misleading.

Which of the following does not describe perception? A. Selectivity. B. Organization. C. Objective. D. Interpretation.

C. Objective. Perception is the process through which someone gives meaning to the surrounding environment. Perception consists of three subprocesses: selectivity, organization, and interpretation. Objectives focus upon the purpose of communication rather than the receipt and interpretation (perception).

Which of the following is not an element of the communication process? A. Encoding. B. Medium. C. Parsing. D. Feedback.

C. Parsing. The communication process has six elements: the sender, the process of encoding the symbols of which the message consists, the medium through which the message is sent, the receiver, the receiver's act of decoding the message, and feedback.

Which of the following is a recognized means of improving relations between the internal audit activity and management? A. External auditor rotation. B. Statistical sampling methods. C. Participative auditing. D. Adoption of a formal policy regarding corporate social responsibility.

C. Participative auditing. Participative auditing is a collaboration between the internal auditor and management during the auditing process. The objective is to minimize conflict and build a shared interest in the engagement.

A supportive behavior that a listener, such as an auditor or a supervisor, can use to encourage a speaker would be to A. Look away from the speaker to avoid any intimidation. B. Interject a similar incident or experience. C. Stop other activity or work while the person is talking. D. Not respond verbally until the speaker stops talking.

C. Stop other activity or work while the person is talking. An effective listener enhances the communication process by sending appropriate nonverbal signals to the speaker. Thus, even though a person can probably listen and do some routine work, a listener who wishes to convey a positive and encouraging message should stop other activities and focus complete attention on the speaker.

Which of the following features of a large manufacturer's organizational structure is a control weakness? A. The information systems department is headed by a vice president who reports directly to the president. B. The chief financial officer is a vice president who reports to the chief executive officer. C. The audit committee of the board consists of the chief executive officer, the chief financial officer, and a major shareholder. D. The controller and treasurer report to the chief financial officer.

C. The audit committee of the board consists of the chief executive officer, the chief financial officer, and a major shareholder. The audit committee has a control function because of its oversight of internal as well as external auditing. It should be made up of directors who are independent of management. The authority and independence of the audit committee strengthen the position of the internal audit activity.

A company is rumored to be considering downsizing. Because a manager stops the use of all temporary employees, the staff concludes that some jobs will be lost. Which of the following is true about the manager's communication about job losses? A. The staff decoded the formal communication sent by the manager correctly. B. The manager properly encoded the idea in a message. C. The lack of a formal message had a negative impact on staff. D. The channel through which the message was sent was appropriate.

C. The lack of a formal message had a negative impact on staff. Management's lack of formal communication regarding possible downsizing caused the employees to draw their own negative conclusions based on a manager's actions. Management should formally communicate the reasons for eliminating the use of temporary employees or refute the rumor about downsizing.

Fact Pattern: A multinational firm was attempting to buy a controlling interest in a medium size (US $10 million annual sales) foreign metal-working firm. The multinational firm's negotiator in the foreign country sent the following email: "The foreign firm won't deal unless 51% ownership." The executive committee of the multinational firm, not wanting a minority interest, then canceled the deal. Upon returning to the multinational firm, the negotiator pointed out that the foreign firm wanted to sell no more than 51% ownership in order to retain at least 49%. Thus, the deal could have been made. The faulty email led to a communications error by the executive committee of the multinational firm. The error was in A. Decoding of the message. B. Choice of transmission medium. C. Understanding of the message. D. Response to the message.

C. Understanding of the message. Because of faulty encoding, the message was open to two different interpretations. The committee chose the wrong one.

Nonverbal communication is a powerful but little-understood form of communication in organizations. All of the following represent forms of nonverbal communication except A. The tone of voice a person selects. B. The positioning of furniture in a person's office. C. Prolonged eye contact. D. A facsimile message from a business associate.

D. A facsimile message from a business associate. Nonverbal communication consists of the nuances that accompany a verbal communication. For instance, the tone of a speaker's voice may communicate something totally different from the words being spoken. Similarly, body language (facial expressions, gestures, posture, and appearance) is a nonverbal communicator. Even the positioning or nature of furniture in an office may communicate something to a listener. A fax message, however, is a verbal communication to the extent that it contains words.

Which one of the following will not help overcome communication problems between the Accounting Department and other departments? A. Interdepartmental task forces. B. Cross-training and job rotation. C. Organization-wide social events. D. A performance appraisal prepared by your immediate supervisor.

D. A performance appraisal prepared by your immediate supervisor. Horizontal communication between departments is often subject to more problems than either upward or downward communication within a single department. Examples of these problems include the use of technical terms understood by only one side in the communication process, faulty channel selection, and interpersonal problems. To overcome these difficulties, the sender must encode the message in the context of the receiver's perceptions; that is, the sender must understand the receiver. The sender must establish an interpersonal climate that encourages the elimination of interpersonal barriers to communication. A performance appraisal prepared by the accountant's supervisor will not help the accountant understand the perceptions of people in other departments.

Which of the following is a false statement about communication? A. Electronic forms of communication blur the distinction between written and oral communications. B. A budget is an example of a formal communication. C. Upward communication is slower than downward communication. D. Business communications tend to be the same all over the world.

D. Business communications tend to be the same all over the world. Managers must consider the nature of the message receiver. Receivers vary in their perception of messages because of language, education, culture, attitudes toward the sender and job, etc.

Which of the following is the best indicator of the effectiveness of a communication on a receiver? A. Understanding of message received. B. Clarity of message. C. Change in receiver's attitude. D. Change in receiver's behavior.

D. Change in receiver's behavior. The best indicator of the effectiveness of a communication on the receiver is the change in the receiver's behavior in the direction requested or required by the communication. The sender has the responsibility to solicit feedback (or observe results) to determine the communication's effectiveness.

Which one of the following statements about the nature of communication is true? A. Communication occurs only when people deliberately and consciously decide to communicate. B. Accounting terms such as "expense," "revenue," "net income," and "variance" mean the same to all users. C. Because managerial accounting reports classify and summarize vast amounts of data, the reports do not add to the information overload within an organization. D. Communication between departments is affected by the level of functional specialization within departments.

D. Communication between departments is affected by the level of functional specialization within departments. Communication between departments is sometimes affected by the level of functional specialization within those departments. Noise of any sort can inhibit communication, and that noise can be physical or nonphysical. An example of nonphysical noise is the difference in expertise between the sender and the recipient. A sender must establish a climate that encourages the elimination of interpersonal barriers to communication.

An advisable strategy for a participant in a meeting of the internal auditing staff is to A. Read the agenda and supporting materials for the meeting during the early part of the meeting to prepare for later discussion. B. Present strong opinions on one side of a proposal right away. C. Present views as trial balloons that can be researched later. D. Consider the opinions and information needs of other participants before speaking.

D. Consider the opinions and information needs of other participants before speaking. Analyzing the audience assists a speaker to gather the right information for the meeting. Moreover, understanding the other participants' opinions and needs enables the speaker to express his/her ideas in the way best calculated to be persuasive.

Which of the following audit committee activities is of the greatest benefit to the internal audit activity? A. Review and approval of engagement work programs. B. Assurance that the external auditor will rely on the work of the internal audit activity whenever possible. C. Review and endorsement of all internal auditing engagement communications prior to their release. D. Determine whether scope limitations impede the ability of the internal audit activity to execute its responsibilities.

D. Determine whether scope limitations impede the ability of the internal audit activity to execute its responsibilities. The CAE, reporting functionally to the board (audit committee) and administratively to the organization's CEO, facilitates organizational independence. At a minimum, the CAE needs to report to an individual in the organization with sufficient authority to promote independence and to ensure broad audit coverage, adequate consideration of engagement communications, and appropriate action on engagement recommendations (PA 1110-1, para. 2). Functional reporting to the board typically involves, among other things, making appropriate inquiries of management and the CAE to determine whether audit scope or budgetary limitations impede the ability of the internal audit activity to execute its responsibilities (para. 3).

Every month, the superintendent of a production department sends copies of the department's production variance reports to the supervisory staff, asking the supervisory staff to explain variances that exceed certain prescribed limits. The superintendent's communication of variances to the supervisory staff and the supervisory staff's explanation to the superintendent of the variances are examples of A. Horizontal communication and upward communication, respectively. B. Formal and informal communication, respectively. C. Informal communication and the grapevine, respectively. D. Downward communication and upward communication, respectively.

D. Downward communication and upward communication, respectively. Communication can be downward (from superior to subordinate), upward (from subordinate to superior), or horizontal (from one peer to another). The superintendent's communication of variance reports to the subordinates is downward communication. The subordinates' replies are upward communications.

A cost accounting manager's job involves coordinating and summarizing monthly production department variance reports that are prepared by various staff accountants. The cost accounting manager then provides the relevant variances to colleagues, the production departmental managers. The accounting reports communicated by the cost accounting manager are an example of A. Downward communication. B. Hierarchical communication. C. Informal communication. D. Horizontal communication.

D. Horizontal communication. Communication can be downward (from superior to subordinate), upward (from subordinate to superior), or horizontal (from one peer to another). It may also be formal or informal. A variance report prepared in the accounting department and sent to production departments is a formal horizontal communication because it occurs among peers laterally through an officially established channel.

Nonverbal communication consists of messages conveyed by I. The physical distance between the sender and the receiver II. The facial expressions used when speaking III. Electronic means of communication such as email VI. Unconscious actions of the speaker while speaking A. III only. B. IV only. C. I and II only. D. I, II, and IV.

D. I, II, and IV. Physical distance and positioning convey many nonverbal messages that depend on cultural differences. For example, Americans tend to prefer a large personal space. Facial expressions provide almost limitless variations of meaning thanks to the dozens of facial muscles and the possibilities created by different contexts, cultures, and individual personalities. In addition to facial expressions, other unconscious actions of the speaker affect the message sent. They include gestures, posture, movement, touch, mode of dress, surroundings, and voice characteristics.

Which of the following are cultural aspects that typically make international and intercultural communication more difficult? I. Long distances between sender and receiver. II. Body language. III. Language. IV. Attitude. V. Time. A. I and III only. B. II and V only. C. I, IV, and V only. D. II, III, IV, and V only.

D. II, III, IV, and V only. Facial, gestural, and postural body language, and other forms of nonverbal communication, may have different meanings in different cultures. Furthermore, because of the differences in language even within the same country, special care must be taken not to make mistakes or offend others in a foreign land. It is nearly impossible for someone with only a few semesters of a foreign language to understand the subtleties of nonnative communication. Attitudes, such as stereotyping, also may cause misunderstandings. In addition, time is a barrier to intercultural communication. The perception of time as it relates to business and social life varies with the culture. Polychronic time is based on a perception that time is nonlinear, flexible, and multidimensional. This perception is typical of Mediterranean, Latin American, and Arabic cultures. Monochronic time is based on a perception that time is the same for everyone and is measurable in standard units. This perception is common in Northern Europe and the U.S. These western cultures believe in punctuality and that time is money and should not be wasted. However, communication difficulties due to the long distances separating senders and receivers have been minimized by electronic communication, such as email, fax, and teleconferencing.

Telecommuting, working away from the office and communicating via electronic media, has become more widespread as advances in communication devices have made telecommuting more practical. All of the following are problems that are beginning to be associated with employees using telecommuting except that the telecommuting employees A. Fall behind in their fields of specialization. B. Lack strong working relationships. C. Experience a loss of career opportunities. D. Lack sufficient communication skills.

D. Lack sufficient communication skills. People who are computer literate have in recent years begun working from their homes via telecommunication devices. Problems include lack of reliable telephone lines, a potential increase in management's work load, the loss of in-office contributions, a tendency to fall behind in fields of specialization, a lack of strong working relationships with other employees, a loss of career opportunities, and inadequate socialization. The primary strength of these individuals, however, has been their communication skills.

An audit committee should be designed to enhance the independence of both the internal and external auditing functions and to insulate these functions from undue management pressures. Using this criterion, audit committees should be composed of A. A rotating subcommittee of the board of directors or its equivalent. B. Only members from the relevant outside regulatory agencies. C. Members from all important constituencies, specifically including representatives from banking, labor, regulatory agencies, shareholders, and officers. D. Only external members of the board of directors or its equivalent.

D. Only external members of the board of directors or its equivalent. The audit committee of the board of directors should be composed entirely of outside directors. Outside directors are members of the board who are independent of internal management. Because the primary purpose of the audit committee is to promote the independence of the internal and external auditors from management, an audit committee composed of inside directors would be ineffective.

To avoid creating conflict between the chief executive officer (CEO) and the audit committee, the chief audit executive (CAE) should A. Submit copies of all engagement communications to the CEO and audit committee. B. Strengthen independence through organizational status. C. Discuss all pending engagement communications to the CEO with the audit committee. D. Request board establishment of policies covering the internal audit activity's relationships with the audit committee.

D. Request board establishment of policies covering the internal audit activity's relationships with the audit committee. Independence is not sufficient to avert conflict unless reporting relationships are well defined.

Which of the following is not a typical function of the audit committee? A. Selecting the chief audit executive. B. Setting the chief audit executive's compensation. C. Selecting the external auditor. D. Setting the chief executive officer's compensation.

D. Setting the chief executive officer's compensation. The audit committee is not normally responsible for setting the chief executive officer's compensation.

Which one of the following statements regarding communication along the grapevine in an organization is false? A. By maintaining open channels of communication, managers can minimize the damage the grapevine can do in an organization. B. Attempts to totally eliminate the grapevine are unlikely to succeed. C. The grapevine communication network can exist in several patterns. D. The grapevine is rumor-mongering, and managers should not use the grapevine.

D. The grapevine is rumor-mongering, and managers should not use the grapevine. A grapevine is the name of the informal communication channel that exists in all organizations. The grapevine exists wherever there are people. Although the grapevine is usually accurate, it can carry gossip and rumor. The effective manager stays tuned into the grapevine and uses it constructively.

Which of the following is not an appropriate member of an audit committee? A. The vice president of the local bank used by the organization. B. An academic specializing in business administration. C. A retired executive of a firm that had been associated with the organization. D. The organization's vice president of operations.

D. The organization's vice president of operations. The audit committee consists of outside directors who are independent of management. Its purpose is to help keep external and internal auditors independent of management and to ensure that the directors are exercising due care. The organization's vice president is not an outside director. The vice president of the local bank used by the organization, an academic specializing in business administration, and a retired executive of a firm that had been associated with the organization are all external parties who are usually independent of the organization's internal operations.

Which of the following actions is most likely to minimize the effect of perceptual errors? A. The sender should ensure that the receiver understands the message by allowing only one-way communication. B. The receiver should consider how the sender decodes the message. C. The sender alone should minimize noise in the flow of communication. D. The receiver should try to understand the sender's perspective.

D. The receiver should try to understand the sender's perspective. Perceptual errors can be minimized in several ways, including feedback from the receiver concerning his/her perceptions and interpretations of the message, understanding of the sender's perspective by the receiver, the sender's sensitivity to the receiver's problems, and implementation of a training program to improve communication skills throughout the company.

All of the following statements about the communication process are true except A. The sender receives feedback from the receiver. B. The receiver is responsible for decoding the message. C. The sender dictates the channel through which the communication will be sent. D. The sender can ensure that the receiver will interpret the message as intended.

D. The sender can ensure that the receiver will interpret the message as intended.

All of the following statements about communication are true except A. Written communication inhibits feedback. B. Managers spend more of their workday involved in oral communication than written communication. C. Written communication provides a permanent record. D. Written communication is usually better when the message is nonroutine and personal.

D. Written communication is usually better when the message is nonroutine and personal. Written communication is usually better when the message is routine and impersonal. A nonroutine message can be better communicated orally. Written communication also offers the advantage of providing a permanent record of the message, but it inhibits immediate feedback because the two parties are not in direct contact. Breakthroughs in electronic technology, such as computers that can recognize the human voice, may in the future blur the distinction between oral and written communication.